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Amalgamation
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At the time of amalgamation why capital reserve is considered as a liability.....Isn't it a share holder fund
Answers (7)
Capital reserve is the difference between the value of net assets and purchase consideration.. If PC is less than net assets then that amount is cap reserve if it's more then it's called as goodwill.. And hence that will be the liability for the purchasing company
Samaira Khan
Capital reserve is the difference between the value of net assets and purchase consideration.. If PC is less than net assets then that amount is cap reserve if it's more then it's called as goodwill.. And hence that will be the liability for the purchasing company
It is Amalgamation in the nature of merger..not purchase
Samaira Khan
Capital reserve is the difference between the value of net assets and purchase consideration.. If PC is less than net assets then that amount is cap reserve if it's more then it's called as goodwill.. And hence that will be the liability for the purchasing company
The capital reserve balance =600 is given in the question itself....it is not considered as a difference
Chandu vadla
may i know, what is your doubt exactly
Why capital reserve balance is taken for calculating net assets taken by transferee company?
Samaira Khan
Capital reserve is the difference between the value of net assets and purchase consideration.. If PC is less than net assets then that amount is cap reserve if it's more then it's called as goodwill.. And hence that will be the liability for the purchasing company
Got the ans..thank you samaira khan
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